First Step in Personal Finance for Newbies: Understanding 6 Practical Money-Saving Tips from "The First Salary"
- 懶大 (Lan Da)
- 閱讀心得
- Last updated: September 16, 2023
- 2 min read
In this article, you'll learn:
summary: “How can salaried workers become wealthy? This is a review of ‘Financial Methods You Should Understand the First Time You Receive a Salary,’ sharing the author’s journey from mid-life awakening to financial freedom. This article extracts 6 core recommendations from the book, covering budgeting, saving, and investing, to help you escape the paycheck-to-paycheck cycle and steadily accumulate wealth.”
Oh, Salary, Drop Dead
When you get your salary, if you don’t have a habit of paying in installments like a savage, you might have a habit of spending it all. But remember, your money is your friend, not your enemy. So, please don’t rush to the mall and swipe your credit card like a barbarian. Remember, your salary isn’t a bottomless pit, but the beginning of the month. So, calm down first!
Budgeting is a Liar
Now, try to create a budget. List your expected expenses, including rent, food, utilities, transportation, and other necessary expenses. Then, calculate the total of these expenses. This way, you’ll know how much money you have available.
Financial gurus all teach you to create a budget? How can you actually follow a budget? There’s always something you want to buy. If creating a budget is painful for you, just give it up. You can choose to use goal-based financial planning and completely ditch that budgeting nonsense.
However, the book still teaches the concept of budgeting. If you can, it’s ideal to budget your money.
Mortgage is Not a House Game
If you’re lucky enough to own your own house, congratulations! But please don’t treat it as an opportunity to make money. Don’t take out loans to buy more things, thinking you can gamble by mortgaging your house. Remember, a mortgage isn’t a game, but a burden.
A house is a tool that can appreciate in value (theoretically), and increasing your mortgage might give you a chance to go ALL IN when you’re confident?
Saving is Spending
Saving money might not sound very fun, but it’s very important. Set up an emergency fund, which is money to deal with unexpected events, like a fire, earthquake, car accident, or missiles from the Chinese Communist Party (negative events), or a sudden party, friends inviting you to a feast, or a red-eye flight (positive events). Put a small portion of your money into this fund each month until you reach an amount that makes you feel secure.
This is exactly the same concept as paying for things in installments, but wealthy people think differently from you.
Investing is Not Gambling
Investing is a way to make your money work for you. But that doesn’t mean you should take your money to the casino and bet it all on red or black. Investing requires some planning, so don’t rush in and don’t blindly follow the crowd.
When you think about investing, you think about buying today and hitting the daily limit tomorrow, but wealthy people think about money lying there and working. There’s no reason to tell it to work today and quit tomorrow, right?
Financial Goals are Not a Joke
Finally, set a long-term savings goal. This could be for retirement, travel, or other financial goals. Put a portion of your money into this goal each month and stick to it. This will not only help you achieve your dreams, but also make you feel more motivated.
But you usually need someone to accompany you to execute this goal (a trusted and neutral advisor is the best choice), and this person is usually not your family, because family members only think about how to spend your money.
Further Reading
懶得變有錢 (Lazy to be Rich)’s Conclusion
In short, personal finance may sound boring, but it’s very important for your financial health. So, remember these six things, and stay calm, budget, mortgage rationally, save, invest, and set savings goals. This way, you’ll be able to enjoy more laughter in the future, rather than tears over your wallet. I hope these six points of financial planning can make your financial journey more interesting!
Returning to my original intention, no one’s financial plan will be the same as another person’s, even twins. Because financial planning is like everyone’s DNA, it’s unique. Because of this, blindly seeking the best solution is not practical. The most practical thing is still the most comfortable lifestyle.
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